Frugality Advice from Millionaires

This is a guest post from Jaime Tardy of Eventual Millionaire. After paying off $70,000 and quitting a six-figure job, Jaime became a business coach. She also interviews millionaires every week for tips and advice. Jamie has appeared on CNN, MSNMoney.com, Fortune.com, Success Magazine, the Yahoo homepage, and more.

Ever since I was little I’ve been curious about the idea of having one million dollars. My mom told me to marry a rich man (!), but as an eight-year-old who didn’t like boys I said, “I want to do it myself!”

I’m not a millionaire. In fact, I wrote a post for Get Rich Slowly about paying off $70,000 dollars of debt a few years ago, and I’m slowly climbing my way up. During the journey, I also read numerous books about millionaires, but I decided I wanted to learn directly from the millionaires themselves.

Last year I started a podcast series of interviews with millionaires to find out what their pivotal moments were, how they did it, and what advice they had to offer. I concentrate on business building, but I also ask about how they handle their personal finances.

To date, I’ve interviewed more than 50 millionaires. Most of them started with very little money (like $50 in their pocket, or they were living with their mom at age 25) and were able to establish and keep up frugal habits once they learned how to make more money. I’d like to share with you some of their direct stories and advice.

Avoid debt
Millionaire Derek Sivers sold his company, CD Baby for $22 million in 2008. But even when he paid the bills as a professional musician and circus clown, he avoided debt. He says:

“I’ve always been very debt-averse. I don’t like being in debt at all, even on the small level. I never bought anything with a credit card unless I had that much money in the bank. The credit card was just a convenience. I never went into negative debt on a credit card, even as a teenager because I just hated that feeling. They say that there are two ways to be rich: one is getting more money, and the other one is lowering your expectations, lowering your needs.”

Derek says that when he was in his 20s he lived off of $12,000 in savings for a few years. Then he got a job with the circus making about $12,000 a year, and he felt rich.

Derek also gave the proceeds from selling CD Baby to a charitable trust for music education, and he continues to live a frugal lifestyle.

Be value conscious
Todd Tresidder, financial coach and founder of Financial Mentor, made most of his money through smart investments. He got the seed money to make those investments by saving almost 70% of his income. I asked Todd how he saved so much money. Todd said:

“I think…it comes back to values. You just have to not have an interest in buying lots of stuff…I was a single, young man, not too far out of college and my mom would get on me. She’d say, ‘Todd, you’re making all this money, why don’t you go buy yourself a Corvette? Go get yourself a flashy car.’ But I lived in Lake Tahoe. I’m an outdoor recreation buff…I’d play volleyball down on the beach; mountain bike in the hills. I run.”

By holding on to what he valued (time spent outdoors), Todd avoided expenses like a big monthly payment on a car he didn’t need (or want).

Buy used and share (and help the environment, too!)
I asked comedian Dan Nainan for one action tip that you can implement this week to move toward your goal, and Dan said the following:

“…figure out how you can save money. Don’t spend as much. Don’t go to Best Buy — get it off of eBay because sometimes it’s a tenth of the cost of retail. Go to Craigslist. I use Craigslist and eBay a lot. You can save a tremendous amount of money because people buy stuff and they don’t need it anymore, and it’s cheaper than buying retail. You’re not only saving money, but you’re buying something from someone so they’re not throwing it out. That’s helping the environment a lot. I mean there are countless ways you can save a lot of money and not consume a lot…it’s a win-win for everyone.”

Dan also says that folks in neighborhoods or townhouses could a lot of things with neighbors to save money, such as a barbeque grill or even a video camera. He also loves the library, of course!

Do what works for you
Matthew Tuttle, owner of Tuttle Wealth Management, a financial management company, had a lot of great information gleaned from working with clients (and their money). Matthew offered the following advice:

“I’m not a big fan of budgets. I’m not a big fan of trying to impose that discipline on someone who just can’t do it. I also find a lot of times spouses vehemently disagree when it comes to budgeting. What I am much more a fan of is, save as much as you can and if you’re saving as much as you can, as long as you’re not going into debt, then I don’t necessarily care where you’re spending your money.

So if I go to someone who is not saving anything and say, ‘I need you to start putting away 20% of your income every year,’ it’s not going to happen. It’s like the idea of boiling a frog. You dump a frog in boiling water it’s going to jump out. So I like to start slow. ‘This month let’s put away 1%.’ Then next month we’re going to bump it up to 2%. Then we’re going to bump it up to 3%, and we’re going to slowly get you used to living on less and less and less and get to a point where you’re saving as much as you possibly can.”

We’ve heard it over and over a thousand times: spend less than you earn. The millionaires I interview look for ways to increase the earnings and decrease the valueless spending.

For instance, Todd values outdoor recreation. He’s not looking to cut his ski trips, but he is willing to cut in other areas he doesn’t value as highly.

Millionaires invest
Many millionaires became millionaires because they don’t spend, they invest:

Spending: To pay money for goods and services

Investing: To spend money with the expectation to gain profitable returns

They look at each purchase, even personal things, as an investment. Of course most personal expenses don’t yield a profitable return in terms of more money in the bank account, but they can offer good value. The self-made millionaires I interview make conscious decisions about what they want and what a purchase will give them in return.

Even though I am fairly frugal I’ve learned a lot from the suggestions of millionaires. I’ve learned a lot from their attitudes about money. One of the reasons I started doing the podcast series was because I used to put millionaires on a pedestal. Now I realize, they are just people like you and me. They have made good and bad decisions in their lives. They learn from their mistakes and try to make better decisions. They even make spelling mistakes, just like me! And these people I have interviewed are also some of the most generous people I’ve ever met. The books I’ve read on millionaires didn’t tell me that.

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Frugality is great but it’s not everything. My income ranges from poverty level (when un(der)employed) to $15K (when fully employed).

How come I never see books about millionaire burger flippers?

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Maggi

I feel burned because I have always been very frugal and put most of my money into real estate and a private loan company. I have lost the equivalent of a house in some parts of the country and nice car in the last few years. Yes, to some degree it is my fault because I did not understand completely what I was doing, but many smarter than I got caught, too. And if I had done this ten years before, I would be wealthy, though not necessarily a millionaire. Now I will be retiring on a very small amount of money compared to what I was hoping for and what I had sacrificed for. I still save, but I’m a little more liberal with my money at times now. Hindsight is 20/20.

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lisa

I thanked TipHero for having the article and now I wanted to thank you Ms. April. I love doing things in a cheaper way but man did this pay off big time! My husband and I were looking for a new comforter set that we would just love and found one. For the tune of 259.99. YIKES! I thought that was high! Found it again but cheaper for (if you can call it that) 239.00. I still was not satisfied. Took your advice and looked on Ebay and found others just as nice. Then lo and behold I found the one we loved. Made a bid and won! Price? 76.00 plus free shipping! So I wanted to chance to thank you as well for writing the article.

Praise God and thank you Ms. April!

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Leslie

Good for you for going to the source. I too put them on pedestals…now you have given me a whole new insight and validation that I am doing the right things in my life to reach that millionaire status.

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Rachel Papworth

Excellent inspiration to live within one’s means and avoid over-consumption. I’m convinced that spending less is one of the keys to peace of mind. Not only do you save money, you reduce your environmental impact. And you have less STUFF to manage: less that can break down, less that needs maintenance, less to clean, less to find space for in your home (and remember you’ve got and where it is), less to worry about being stolen…

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Devon Dudeman

While agree that frugality is important, and frivolous spending should be avoided, I disagree that one should avoid debt.

Bad debt should be avoided at all costs ie school loans, car loans, credit cards, personal home mortgage, etc.

It comes down to assets vs liabilities…most people accumulate liabilities (something that costs money every month) and have little or no assets (something that makes money every month.

The name of the game is cash flow. every business owner knows that.

There’s also rich, and then there’s RICH. I have every intention of being RICH. I don’t care for slaving away until I’m 60 to hopefully have a “net worth” of 1.3–>2.2 million…that’s not rich.

That’s why I pride myself on my education, and young age. at 22 I’m well on my way to being RICH, whereas most people worry about just getting rich, if even remotely independent.

I live somewhat frugal for now, but I also have a business and investment vehicles. I’ve made more mistakes than most, but im richer as a result.

In 22 years, I’ve flipped a house, failed 3 businesses, own several money making websites, and have a great business partner in an offline venture. I’m working my ass off, and I won’t have to wait til I’m old to reap what I’m sowing.

Hope you enjoyed the comments.

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Laura+Vanderkam

Hi Jaime- interesting piece. I would agree that “live within your means” is the first step. But it’s a lot quicker to get to a million if you net $250,000 a year and live on $150,000 than if you net $50,000 and live on $20,000. The latter person is proportionally more frugal. She’s better at living within her means. But she’s only got $30,000 to put away, whereas person one has $100,000 extra. Income is a huge part of it as well, particularly in a world with very limited returns in many investment vehicles at the moment. I’m glad you’re focusing on business and income growth in your interviews because I think that’s got to be step 2.

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STRONGside

Treating every expense as an investment is invaluable advice. What return will you get for the purchase? Immediate satisfaction or longterm benefit? This simple shift in thinking could save you and earn you a lot of money in the long term.

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Sonja

For me this is a question of goals. Why would you want a million dollar? What is the great thing about becoming a millionaire if you spend all the way living like you’ve got nothing to your name? And very likely, will keep that up after you become that millionaire. What is the motivation to keep living frugally, for ever?

I’d love lifestyle creep. I’d love to be able to spend more, and buy nice things. And yes, part of that is also saving some for the future. But for the goal really isn’t to have as much as possible later, but having a balance between nice things now and security for later. I wonder how this balance works out for these millionaires, both now and during their race to riches.

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jack foley

So true..

Earn-Save-Invest…

Most people

Earn-Spend-Spend…

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El Nerdo

This is good stuff, and the interview with Derek Sivers was great, I listened to the full 1+ hour of it. Looking forward to the others!

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doug_eike

You’re right that wealthy folks tend to invest and make their money work for them rather than spend. The spending we see them do is on the fringes, while the corpus is safely tucked away in some income-producing investment vehicle. Thanks for the insights!

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Rob in SC

My parents grew up poor children of the depression. Dad shipped off to Korea because he wanted a better life after spending a summer in a chicken processing factory. So poor, he ate molded sandwiches that a sister provided for him on the train trip from Chicago to the West Coast. Once married, they lived in a garage apartment with gifted furniture. College was paid via the GI Bill. Dad worked for the same company for 30 years and simply reinvested dividends of the company stock. Took early retirment to start his own business. Mother was self employed and successful. Nearing 80, they work more for self worth than net worth. However, I believe in the back of their minds the roots of their youth runs deep and anchors them. Less frugal today and enjoying life, and I’m happy for them and find them an inspiration.

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Steve

I accidentally the whole barbeque grill.

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Splendor

I don’t like budgets but I do like the suggestion of spending less and saving.

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Sara

I think it is worth repeating that rich people don’t always look or spend like we think rich people do. I grew up quite challenged financially, and just now in my mid-30’s am I realizing that the people that show their money are usually doing so with debt. That realization is worth re-hearing, since “spending” thoughts creep back in to my head a fair amount. In 5 years I paid off 35k in debt while making very little, and once making more, I’ve managed to save finally (with the 1%, 2% trick mentioned). I’m not shooting for millionaire, but being the first in my family with an IRA feels as good as first in my family to college. It was a slow path, and articles like this keep me on it. Thanks for the article.

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anomalophobe

Personally, I could care less about the dollar amount that was paid off – I’d like to hear more stories that talk in percentages.

So, if I paid off $100,000 in a year, great! But what if I made $1,000,000 per year? That’s 10% of my income – I think that task is very doable.

What about someone who had “only” $30,000 of debt, but makes $40,000 per year? That’s a whopping 75% of their income – outstanding feat to say the least!

I dunno . . . maybe nobody has (or can attain) that level of debt.

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Bella

Never underestimate the ability of an average American to accumulate vast amounts of debt 🙂 Hopefully hte new laws have improved this situation but before the recession it was probably not very difficult to obtain consumer debt equal to 75% of one’s annual income – not to mention “good” debt like mortgages, student loans etc…
Maybe you meant to sayt hat you haven’t seen stories of people being able to PAY OFF that percentage of debt – in which case I totally agree, those kinds of stories are few and far between.

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Patricia

It took us 15 yrs. to pay off my husbands 10 yr. student loan, because we didn’t have to make payments when he was unemployed. We did it with 4 kids and a very modest income. My kids never went to Disney and they all turned out great (3 with Bachelors, 1 so far with Masters, all making BIG bucks — more, inflation adjusted than we ever did.) No Disney vaca, no McMansion, no Abercrombie and Fitch. But we had sailboats and went to an amusement park each year and played Uno and Scrabble instead of going to the movies. It still can be done. You just have to set your priorities. Ours was not to blow money (which we did’t have and weren’t willing to to put on credit we could’t pay) on frivolities.

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Krantcents

When I was very young, I read a lot of biographies of famous people to learn about success. I achieved financial independence through rental property a long (27 years) time ago. I have always maintained a low profile lifestyle and only used debt to build assets.

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partgypsy

Though it sounds like the same advice, yes, it does seem to kick it up another level. Basically every dollar counts, and No one, is going to value your money to the same extent you do. People who have the ability to accumulate that kind of money do seem to have a different mindset than the average person. I don’t have any aspirations of ever saving a million before I die but I think I CAN do better than I’m doing now.

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Bella

I like this article. Although I think a lot of the critisism is correct in regards to – yea – but how did they make their MILLIONS? Especially since I started reading GRS we have followed a lot of the tenets listed out here. I’ve been working my way through YMOYL and I just did the calculation for how much my actual wage is – and to be honest – it was not a motivator to cut back on anything. I needed a little diffferent kick in the pants I guess. This article fitthe bill. I’m going to go work on developing some new high goals. Something involving a net worth of a million and an age.

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Jaime @ Eventual Millionaire

Great to hear Bella!
If you are looking for more info on entrepreneurship or inspiration you can listen to the podcast or download the transcripts of the interviews.

Give me some ideas on what you are looking for and I can recommend the best interviews to listen to too. 🙂

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Bella

This article really got me thinking this morning – how to get to a net worth of a million before 40. Why 40? Cause I already passed 30 – and 50 isn’t a real big challange. And yea, I’m gonna totally cheat and include our families (me and my husband)net worth instead of just mine. But hey – it’s my goal right? I guess what’s got me thinking about it is that when I graduated college I had a goal to make 6 figures before 30 – but other than working really hard at my job – I didn’t really do much else to insure completion – it was really up to my employer. The net worth bar though – involves not just income but savings as well. And in addition I think I am now at a point where I have the means to make money outside my regular job – ie real estate investment, significant stock portfolio etc… to get from here to there. It’s a goal that requires much more active management than just excelling at my day job.

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Attila The Solopreneur Mentor

It is always very interesting to see how frustrated people get when they are told : There is not much secret about it, only that you have to apply bunch basic principles ALL THE TIME, and make conscious decisions.
Everybody jumps when told spend less than you earn, but never comment on the Avoid dept clause.

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Elizabeth

For me avoiding debt is part of spending less than I earn. It scares me spending money I don’t have in the bank.

Except for a mortgage. I may have to suck it up and deal with that one.

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Vanessa

When millionaires say they avoid debt do they just mean for consumer stuff? What about their businesses? Didn’t some of them need to take out loans when first starting out? Did none of them have student loans which maybe gave them the education to make those millions?

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Jaime @ Eventual Millionaire

It depends on the millionaire. Many of them didn’t take a loan and just bootstrapped the business. Many of them didn’t go to college.

I still need to ask about whether they took loans for college or how much debt they might have.

I plan on sending all of them a survey soon to get all of the details. (I’d love to write a book on all of this info I have been finding!) 🙂

Also there is a book called The Education of Millionaires. I haven’t read it yet but I know it talks a bit about college and whether or not the millionaires he spoke to thought college was worth it. 🙂

Hope that helps!

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bianque

I have an 11 y.o. Corvette and buy gently used tires on ebay all the time. Saves me hundreds of dollars.

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Joseph Ratliff

Jaime,

Solid advice that falls right in line with the types of posts I have read on this blog.

“Spend less than you earn” is solid advice, and if more people were actually doing it…there would certainly be more millionaires. 🙂

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Carla

…not if you never earned more than say…$50K a year (in an area with a high cost of living). A good emergency savings is the best many of us can do. Not everyone on GRS are high rollers.

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Sam

Good examples of what most of us know. But I like the reminder, especially this time of year.

I’m working on our annual spending plan, our form of a budget, which since we use an allowance system allows each of us to spend some money as we see fit. Similar to Tuttle’s advice.

We buy nused cars and we use Craigslist for a lot of our investment property needs (although that can be a bust and no way to return on CL) or we buy new for our house and transfer used appliance to investment property.

We avoid debt, and are working to pay down mortgage, we save a lot and are trying to save more.

We have flirted with the $1MM number for the past few years but have yet to get solidly above it.

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Andrew U

As a 26 year old still living with mommy and daddy, I enjoyed reading this article. I have a goal of having a net worth of a million dollars by the time I am 40 and this just proves to me it is very possible.

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Jaime @ Eventual Millionaire

Try reading the book the Millionaire Fastlane. I interviewed MJ Demarco (the author) on how he made his millions. He was and still living at home at 25. It’s a great read for where you are right now! 🙂

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Miser+Mom

What I think is so interesting about this (and I’ve seen this link between wealth and frugality in a lot of other places) is the notion that the truly wealthy don’t actually act rich. A fancy car might look impressive and worthy of emulating. A healthy bank balance and a 10-year-old Toyota, not as flashy.

When we think about what it means in our own lives to become wealthy, articles like this are good for reminding us what that really looks like.

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Beth

I agree! I’ve got a ten year old Toyota, actually 😉

I’d like to know more about how these people got to where they are. It’s easier to get ahead when you earn $100K and live on $40K than earning $50K and living on $40K (for example). Frugality is great, but once you’ve got that mastered the only way to move forward is generate more income.

Sometimes I find it frustrating reading about people who made it big in the market when market conditions aren’t what they are now. I’m trying to decide if this recession is going to a help or a hinder to my future finances.

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Jaime+B

That depends on your definition of “truly wealthy”. Someone with a million (or even 2 million) in the bank, who is driving a 10 year old car is certainly doing well for themselves but I wouldn’t consider them “truly” wealthy. In my mind, the “truly” wealthy are those who have so much money that they can never work another day and their kids can not work and their grandkids can not work and there’d still be millions in the bank. They may still drive a 10 year old car, but even if they bought 10 new cars a year they would still have money making more money. LOL, maybe that’s the stratopherically wealthy. 😉

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GS

I agree. The freedom to decide whether you want to work or not is what makes you rich. But you can achieve that with a only a million at least for yourself. There are enough stocks (so that you can diversify) out there that offer dividend yields of 5 % or more. Once you managed to amass a million, you’d only need to wait for the right moment to invest in such dividend stocks. Early 2009 would have been a fanatastic time to do that. But opportunities like that come and go. Many of these stocks now yield more than 10 % based on their 2009 price. You can surely live off that comfortably without needing to work at all.

For me, it’s more of a problem to get the first million than finding a way to invest it in a way that gives you enough money each year to live off your wealth. You’d need only need some research and a little bit of patience – but not decades. Without a very high paying job or a decent business idea, you’ll probably need decades to get to that point.

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Pat

What always frustrates me about these posts is that they seem to center around the “spend less than you earn” mantra. That’s all well and good, but it’s not exactly groundbreaking, especially for a money blog. Shouldn’t it be assumed that if you’ve made it to the point where you’re ready to focus on doing what it takes to make a million dollars, that you’ve gotten control of your debt and live within your means?

With the above said, I would like to hear more from millionaires about the steps that they took to build the businesses or products that increased their income. Derek S. sold “CD Baby” for $22 Million, which is amazing. Tell me more about how he got there and less about the fact that he doesn’t spend on credit cards.

I really don’t mean this to sound harsh, but there is more to making it big than simply cutting expenses and living within your means. Even though both of those are important traits of the rich.

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Jaime @ Eventual Millionaire

Hi Pat! That is exactly what I concentrate in my interviews. It’s very business focused and how they built up from nothing.

I geared this article towards personal finance (which I touch on in each interview) because it was for J.D. But check out the transcripts for how-to’s from the millionaires on earning their money. 🙂

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Beth

I’m glad you pointed that out, Jaime. I was thinking the same thing. I’m already doing most of these things but I’m definitely not making millions! I’m curious to see how salary, entrepreneurship and investing all factor in.

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Pat

Thanks Jamie; that makes sense. I will definitely be checking out the transcripts.

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Patricia

We did it by “living below our means.” Even with moderate income and many stretches of unemployment, we did it. It wasn’t fun living in a 900sf house with 4 kids (we eventually finished off the attic and part of the basement ourselves, which took it up to about 1750sf) and “vacations” were getting a double room with a kitchenette & I brought the pots and pans and grocery shopped every night. But we did it. The kids all survived and got their degrees and are all making way more money than we ever did. I’m driving a 10 yr. old used truck that I love. The living “modestly” hasn’t changed even though we have 1M in assets. I’m keeping my truck.

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Maggie@SquarePennies

Congrats, Patricia, on all that you accomplished! Your vacations sound like ours! We had a slightly bigger house, but never had “good furniture.” We put all 4 kids through their bachelor degrees & 2 of them paid their own way through to master’s degrees (and one of them a Ph.D.). Our goal was for them to be able to support themselves, and we are happy that goal was accomplished. If we’d made them pay their way through undergrad we would have had more money in retirement, but we thought they wouldn’t get their degrees if they had to pay it. Possibly we were wrong, but that was our thinking.

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Mrs. Money Mustache

While this advice is not revolutionary and it’s been heard time and again, how many people really follow it? It’s like telling people they need to eat well and exercise to lose weight, but many are inclined to try all kinds of fad diets instead.

I really feel like becoming “rich” is a lifestyle, just like being healthy is a lifestyle. There’s no quick fix and if you don’t have the right attitude and perspective, then making more money is not going to help you much. The average person is MUCH more likely to increase their wealth through savings than any other strategy. Plus, in order to get to that point, you learn a lot about yourself and the world along the way.

If you happen to also invest well and build your own business to increase your income, then great! But, if you don’t have the right attitude, you may just end up spending more money anyway.

I think that those that Get Rich Slowly are the ones that have really got it made. They have a life filled with meaning and they know that buying things won’t make them happy. They also get something very valuable: more time to spend however they want.

Getting there is a long process and many people feel deprived along the way. Once you stop feeling deprived and start feeling invigorated and even happier than you were before, that’s when you know you’ve hit the jackpot.

I love hearing about these Millionaires Next Door. Thanks for the great post!

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Jaime @ Eventual Millionaire

I agree! I just wrote a whole manifesto about that. To me it’s about the lifestyle, and I found that many millionaires agree it’s not about the money. They live a wealthy lifestyle and love what they do.

And thank you for reading and commenting. 🙂

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Poor to Rich a Day at a Time

While it is pretty much the same advice that has always been given, it is still an interesting read. I have known quite a few folks who could of been millionares by now but they never knew how to use frugal measures. They lived a life of wanting that really “false” rich image of the jonses and it left them mired in debt, always borrowing from relatives and living always above their means to keep that false image…….a high cost to pay if you ask me!

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Jaime @ Eventual Millionaire

That is exactly why I like to find people with a net worth of a million or higher. I could find a lot of people with a million dollar plus business but to me it’s not about that.

It’s about being smart with your money once you have it too. I’ve been refused a lot of interviews from some amazing people though, because they don’t want to be seen as a “millionaire”. Also I find quite a few people that I thought would have a million dollar net worth and don’t. 🙂

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Molly (Mike and Molly’s House)

My Grandfather (a retired teacher who died a million from his investments) subscribed to the idea of not spending and everything extra went to investments. He never changed his standard of living even as his investments made him a very wealthy man.
The other side of it was that it was an obsession. He wanted all the money to be left to his children and not spent in his lifetime. He got a goal and stuck to it disregarding his wife’s wishes (this was her retirement too). My grandmother didn’t want much but would have enjoyed traveling (just a tiny bit) outside of her tiny town.

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Jaime+B

This is something I worry about with my folks. They really want to leave some money to us kids, but I’m always telling them that while that would be nice I don’t want them depriving themselves of fun in their retirement to do it. None of us are rich, but we’re all able-bodied, working adults – it would be just fine for them to leave us nothing in my opinion.

Of course, they know and we know that something catastrophic could happen too and they might need every penny. But, if my Mom wants to take 1 trip to Europe in her life (and she does) then I’d rather she spent that money on herself than save it for us. She would do more, it’s really my Dad who is the one who puts the brakes on more. They’re both frugal, but my Dad has more anxiety about whether they’ll have enough to last. Nevermind, that there’s 4 kids who can help if needed when the time comes. lol

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Kylie Ofiu

My mother in law is like that. She is not wealthy, but she won’t do things for herself. I keep telling her not to worry about her kids when she dies, that she should live her life and do what she wants.

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Patricia

We have 4 kids, too — 2 Engineers, an entrepenuer with 2M in savings, and a Psychologist. BUT, and that’s a BIG BUT, we don’t want to be dependent on our kids any time in retirement. We’re about to retire with 1M in assets and will continue to live frugally/modestly NOT to leave them an inheritance, but to have enough money for whatever may happen into our 80s. If I’m a widow and need to pay to have people to come to my house to help me rather than being a Medicare nursing home recipient OR asking my kids for money to stay out of a “you’re broke” ratty Medicare nursing home, I’m gonna keep living frugally on that 1M. Been living frugally/modestly all my life, no extravagant vacations, fancy cars, McMansion for me then or now. I truly don’t want them, anyway. We worked REALLY hard to have this retirement money and have no intentions of wasting it. I love my 10 yr. old truck!

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Maggie@SquarePennies

We also have 4 grown kids. Ours are doing well, but not as rich as yours. We do not want to depend on our kids for money and don’t think we’ll have to. We have saved half of what you have, but we have a good pension we are able to live off of just fine. We travel some, live fairly frugally, as always. We are able to put money into savings yet. I think the key is to not increase the lifestyle too much, but just live the way you always have. And try to keep as healthy as you can. All the best to you!

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Molly (Mike and Molly’s House)

I should have prefaced we live frugally. Which to me means,’The virtue of getting good value from every minute of my life energy and from everything I have the use of.’ Yes, this is a quote straight out of “Your Money or Your Life”!
My grandfather went forward with one singular goal- grow his investments. This was at the risk of his relationship with his wife and family.
I take much of what he did in a positive light- he lived in the same house, paid it off, drove older cars.

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Patricia

Kudos to you Maggie! We don’t have a pension, so every dollar we saved is precious, NOT to leave an inheritance, but to make it through to the end. We didn’t put our kids through college, but one of our Engineers has medical issues which we cost us a lot. And he lived with us until he was 32. The point is, you don’t need to sell a biz for 22M to retire if you’ve always lived modestly/frugally. And we never had “good” furniture. And still don’t. 🙂 We went from 4 kids to the older 4 grandkids (9-13 yrs. now) to the 8 mo. granddaughter who will be a big sister in August. I never wanted “good” furniture anyway. What’s the point on spending money on “stuff”?

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Dogs or Dollars

This is interesting in that its not exactly groundbreaking. It’s basically the same advice we always receive, taken up a notch… or two.. or three.
Spend less than you earn, buy used, avoid lifestyle inflation. This is the result of doing it consistently, pushing the envelope with it, and perhaps being in the right place at the right time, for some of these folks.

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Jaime @ Eventual Millionaire

Now that I’ve interviewed over 50 millionaires its cool to hear what the pivotal moments were. Most of them (as do I) believe in the saying, “the harder you work the luckier you get”.

I agree there is no groundbreaking advice here. Which is good to know though! It’s not like they are leveraging tons of debt, many of them are frugal too and act like I do. 😉
It just cements my commitment.

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SB @ One Cent At A Time

One important aspect is missing though..the way millionaires created value out of their job or business. With less earning you will reach the upper limit of saving early.

If you don’t increase your income, how far can you really get by smart investing alone?

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Lindsay

This is a good point. It makes me think of a correlary to Tuttle’s “save 1%, then 2%” advice on how to ease into saving more money, which is this: if you get a raise or increased income, put that extra dollar amount into savings or add the extra to what’s automatically drafted into savings each paycheck. This way you avoid lifestyle inflation because you never see that extra money, *and* increase your savings ratio without having to sacrifice anything.

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